Q3 Presentation 2012 24 October, 2012 Disclaimer This - - PDF document

Q3 Presentation 2012

24 October, 2012

2

Disclaimer

• This presentation has been prepared by Duni AB (the “Company”) solely for use at this investor presentation and is

furnished to you solely for your information and may not be reproduced or redistributed, in whole or in part, to any

• ther person. By attending the meeting where this presentation is made, or by reading the presentation slides, you

agree to be bound by the following limitations.

• This presentation is not for presentation or transmission into the United States or to any U.S. person, as that term is

defined under Regulation S promulgated under the Securities Act of 1933, as amended.

• This presentation contains various forward-looking statements that reflect management’s current views with respect

to future events and financial and operational performance. The words “believe,” “expect,” “anticipate,” “intend,” “may,” “plan,” “estimate,” “should,” “could,” “aim,” “target,” “might,” or, in each case, their negative, or similar expressions identify certain of these forward-looking statements. Others can be identified from the context in which the statements are made. These forward-looking statements involve known and unknown risks, uncertainties and

• ther factors, which are in some cases beyond the Company’s control and may cause actual results or performance to

differ materially from those expressed or implied from such forward-looking statements. These risks include but are not limited to the Company’s ability to operate profitably, maintain its competitive position, to promote and improve its reputation and the awareness of the brands in its portfolio, to successfully operate its growth strategy and the impact of changes in pricing policies, political and regulatory developments in the markets in which the Company

• perates, and other risks.
• The information and opinions contained in this document are provided as at the date of this presentation and are

subject to change without notice.

• No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness,

accuracy or completeness of the information contained herein. Accordingly, none of the Company, or any of its principal shareholders or subsidiary undertakings or any of such person’s officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document.

2012 Q3 Highlights

• Professional affected mainly by weak EUR

– Volume declined by some 3% primarily reflecting a soft market in combination with less invoicing days in September (start of Christmas season). – Negative currency effects due to weak EUR.

• Consumer - improved sales trend

– Deliveries to new major accounts started during the quarter. – Roll out initially influencing EBIT negatively.

• Tissue

– Low capacity utilization main explanation for weak result contrary to a strong quarter last year. – Test runs for new qualities.

• Cash flow remains strong, driven by

normalized capital expenditure and activities to bring down seasonal stock level.

• Net sales SEK 849 m

(917)

• Underlying operating

income SEK 63 m (98)

• Underlying operating

margin 7.4% (10.7%)

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Market Outlook

• HORECA market long-term growing

in line or slightly above GDP

– Positive eating out trend. – Higher growth in take-away sector.

• Negative macro statistics in majority
• f markets translates into softer

demand.

– European debt crises still creates uncertainty regarding economic recovery. – Key market Germany now facing negative growth figures for HoReCa.

• Pulp and energy lower than last year

however input material for traded goods remain on high level.

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HoReCa Sales development Germany (July 2012)

Source: destatis

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 +5.4% in volume in Aug and +5,4% in value.

Restaurant Sales Development,

Sweden (Aug 2011 – Aug 2012)

Business Areas

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Professional

–Lower sales and EBIT mainly impacted by currency

Sales and EBIT 1)

500 1 000 1 500 2 000 2 500 3 000 2008 2009 2010 2011 LTM 2012

0% 2% 4% 6% 8% 10% 12% 14% 16%

Sales EBIT Margin

1) Excluding non-recurring costs and market valuation of derivatives

• Loss of low end business in Denmark and Sweden impacted
• Nordic. Discontinued contracts in UK impacting Central Europe

while development in Germany follows overall market trend.

• Russia main growth driver for South and East, while Italy and

Spain hurt by economic recession.

• Evolin roll out continues.

Geographical split – sales Q3 2012

696 8 119 417 152 Q3 2011 ­3.1% ­8.8% 635 TOTAL 12.5% 12.5% 9 Rest of the World 0.8% ­6.7% 111 South & East Europe ­2.6% ­10.1% 375 Central Europe ­7.2% ­7.9% 140 Nordic

Growth at fixed exchange rates

Growth Q3 2012 Net sales Professional

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Evolin Campaign

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Consumer

– Positive trend with growth in Central Region

Sales and EBIT 1)

200 400 600 800 1 000 2008 2009 2010 2011 LTM 2012

­8% ­6% ­4% ­2% 0% 2% 4% 6% Sales EBIT Margin

Geographical split - sales Q3 2012

• Stagnating market in grocery retail trade.
• Central region positively impacted by implementation
• f new accounts. Roll out estimated to be finalized by

year end.

110 4 90 16 Q3 2011 ­1.6% ­8.2% 101 TOTAL 0.0% 0.0% Rest of the World ­50.0% ­50.0% 2 South & East Europe 1.1% ­6.7% 84 Central Europe ­6.3% ­6.3% 15 Nordic

Growth at fixed exchange rates

Growth Q3 2012 Net sales Consumer

1) Excluding non-recurring costs and market valuation of derivatives

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Tissue

– Low capacity utilization

Internal 54% External 46%

Sales m ix Q3 2012

• Negative absorption effects from avoidance of stock build

up and test runs .

• Sales on par with last year.

Sales and EBIT

100 200 300 400 500 600 2008 2009 2010 2011 LTM 2012 0% 2% 4% 6% 8% 10% 12% 14%

Sa les EBIT Ma r gin

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Financials

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Operating Margin 7.4%

3.46 163 ­61 ­20 9.2 % 253 ­9 244 9 ­21 ­128 ­332 26.1 % 716 2 744

YTD 2011

1.01 47 ­11 ­3 7.4 % 63 1 62 ­4 ­5 ­39 ­97 24.3 % 207 849

Q3 2012

5.07 238 ­83 ­29 9.8 % 363 ­13 350 ­11 ­29 ­166 ­436 26.8 % 993 3 701

Q3 LTM

5.54 261 ­98 ­30 10.6 % 404 ­16 388 ­30 ­172 ­441 27.1% 1 031 3 807

FY 2011

2.98 1.34 Earnings per share 140 63 Net income ­46 ­26 Taxes ­20 ­8 Financial net 8.1 % 10.7 % Operating margin (underlying) 212 98 Operating income (underlying) 6 Non­recurring items1) 207 98 Operating income (reported) ­3 4 Other operating net ­20 ­7 R&D expenses ­122 ­43 Administrative expenses ­327 ­105 Selling expenses 25.7 % 27.1 % Gross margin 678 248 Gross profit 2 638 917 Net sales

YTD 2012 Q3 2011 SEKm

1) Restructuring costs and market valuation of derivatives

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Quarter affected by FX effects and lower capacity utilization

10.7% 98 917 9.2% 10 111 ­4.4% ­5 110 13.3% 93 696

Q3 2011

7.4% 63 849 ­2.2% ­2 112 ­11.8% ­12 101 12.1% 77 635

Q3 2012

9.8% 363 3 701 0.7% 3 429 2.0% 11 563 12.9% 349 2 709

Q3 LTM

10.6% 404 3 807 5.9% 25 428 3.4% 21 612 12.9% 357 2 766

FY 2011

Duni Tissue Consumer Professional

SEKm

Operating margin Operating income1) Net sales Operating margin Operating income1) Net sales Operating margin Operating income1) Net sales Operating margin Operating income1) Net sales 9.2% 8.1% 253 212 2 744 2 638 6.1% ­0.8% 20 ­2 324 325 ­0.8% ­3.8% ­3 ­13 403 354 11.7% 11.6% 237 228 2 016 1 959

YTD 2011 YTD 2012

1) Excluding non-recurring cost and market valuation of derivates

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70 3 26 4 38 ­66 ­58 125

Q3 2011

84 ­15 27 ­3 11 ­20 ­21 90

Q3 2012

187 1 ­23 ­23 16 31 ­287 473

Q3 LTM

76 ­58 23 ­8 ­36 ­37 ­377 511

FY 2011

83 194 Operating cash flow ­74 ­15 Change in working capital 46 ­1 Other operating working capital ­4 ­19 Accounts payable ­23 29 Accounts receivable ­92 ­24 Change in; Inventory ­177 ­87 Capital expenditure 333 296 EBITDA1)

YTD 2011 YTD 2012 SEKm

1) Excluding non-recurring costs and market valuation of derivatives

Strong Cash Flow: reduced stock building and lower capex

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Net Debt at all time low for Q3

1.6 36% 26% 14% 2 810 2 070 740 2 810 ­284 ­270 604 481 210 870 1 199

Q3 2012

745 755 Net debt 2 082 1 979 Equity 2 827 2 734 Equity and net debt 17% 17% ROCE2) 29% 32% ROCE2) w/o Goodwill 36% 38% Net debt / Equity 1.5 1.5 Net debt / EBITDA2) 2 827 2 734 Net assets ­300 ­323 Other operating assets and liabilities3) ­302 ­315 Accounts payable 663 670 Accounts receivable 470 534 Inventories 210 241 Net financial assets1) 888 728 Tangible and intangible fixed assets 1 199 1 199 Goodwill

FY 2011 Q3 2011 SEKm

1) Deferred tax assets and liabilities + Income tax receivables and payables 2) Excluding non-recurring costs and market valuation of derivatives 3) Including restructuring provision and derivatives

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Financial Targets

• Organic growth of 5% over a

business cycle

• Consider acquisitions to reach

new markets or to strengthen current market positions

• Top line growth – premium focus
• Improvements in manufacturing,

sourcing and logistics

• Target at least 40% of net profit

Sales growth > 5% EBIT margin > 10% Dividend payout ratio 40+%

• 2,0%

(at fixed exchange rates)

9,8%

Q3 LTM 20 12

3.50 SEK per share (2011)

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Thank you!